ICICI Bank [Get Quote] has reduced its interest rates on new home loans by 0.25-0.50 per cent with immediate effect.

For priority sector home loans below Rs 20-lakhs (Rs 2 million), the new interest rate will 9.75 per cent as against the earlier 10 per cent, an ICICI Bank spokesperson said.

For loans in the range of Rs 20-30-lakhs (Rs 2-3 million), the interest rate has been reduced to 10 per cent as against the earlier 10.5 per cent.

For loans of above Rs 30-lakhs (Rs 3 million), the interest rate has been reduced to 11.5 per cent as against the earlier 12 per cent.

The reduced rates are applicable only to new home loans, the spokesperson said.

BoB too cuts rates: Responding to signal from RBI, Bank of Baroda [Get Quote] on Friday announced cutting benchmark lending rate by 50 basis points to 12 per cent effective from April 1.

The bank has decided to reduce its benchmark prime lending rate by 50 basis points from existing 12.5 per cent, Bank of Baroda informed the Bombay Stock Exchange.

The cut in the bank's prime lending rate will reduce the interest burden in all BPLR-linked advances, including home loans from the bank.

On Thursday, another Mumbai-based state-owned lender Union Bank of India [Get Quote] had announced a 0.50 per cent cut in BPLR to 12 per cent.

As part of monetary easing measure, RBI cut Repo (overnight lending rate) by 50 basis points to 5 per cent and Reverse Repo (overnight borrowing rate) identically to 3.5 per cent signaling banks to cut rates.

Following RBI's move to cut its key rates, other banks are expected to slash their lending rates in few days.

UCO Bank [Get Quote] had said that the board is meeting on March 7 to decide about the rate cut.

"With the rate cut, there is good case for rates to come down. Bank is likely to cut its PLR by 25 basis points in its board meeting to be held on March 7," said UCO Bank chairman and managing director S K Goel.